Russia's Central Bank Taking Control Of Troubled B&N Bank

A man walks out of Russia's B&N Bank headquarters in central Moscow on September 20.

Share

Russia's Central Bank Taking Control Of Troubled B&N Bank

share

The Russian Central Bank says it is taking over the country’s 12th-biggest lender by assets, less than a month after another leading Russian bank had to be rescued.

The Central Bank said on September 21 that B&N Bank would benefit from a "reinforcement of its financial stability" by having the regulator become its principal investor.

On September 20, the Central Bank and B&N Bank said the lender requested a bailout through the newly created Fund for the Consolidation of the Banking Sector.

The ratings agency Fitch suggested in August that the bank, which is part of a conglomerate owned by tycoon Mikhail Gutseriyev and his family, had cash-flow problems.

B&N Bank’s assets account for 2 percent of the Russian banking system, according to Fitch.

In late August, the Central Bank stepped in to save Russia’s largest private lender and eighth-biggest bank overall, Otkritie, amid fears over its stability following a sharp drop in customer deposits.

The Russian banking sector continues to feel the consequences of a crisis that struck the country in 2014 as world oil prices crashed and Western governments imposed sanctions over Moscow's aggression in Ukraine.

Analysts say that while the problems that have hit B&N Bank and Otkritie could also affect other lenders, large state-controlled banks that dominate the sector remain solid and the risk of a major crisis is not great.